<PAGE>

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

    For the quarterly period ended September 30, 2000

                                       OR

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

  For the transition period from        to

                          Commission File No. 0-25648

                            AFG Investment Trust D
            (Exact name of registrant as specified in its charter)

                  Delaware                              04-3157233
       (State or other jurisdiction of                (IRS Employer
       incorporation or organization)               Identification No.)


          88 Broad Street, Boston, MA                      02110
    (Address of principal executive offices)             (Zip Code)

       Registrant's telephone number, including area code (617) 854-5800


  (Former name, former address and former fiscal year, if changed since last
                                   report.)


  Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X]  No [_]

               APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS

  Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes [_] No [_]
<PAGE>

                             AFG INVESTMENT TRUST D

                                   FORM 10-Q

                                     INDEX

<TABLE>
<CAPTION>
                                                                                                   Page
                                                                                                   ----
<S>                                                                                                <C>
PART I.   FINANCIAL INFORMATION:

                     Financial Statements

            Item 1.


                     Statement of Financial Position
                       at September 30, 2000 and December 31, 1999..............................       3


                     Statement of Operations
                       for the three and nine months ended September 30, 2000 and 1999..........       4


                     Statement of Changes in Participants' Capital
                       for the nine months ended September 30, 2000.............................       5


                     Statement of Cash Flows
                       for the nine months ended September 30, 2000 and 1999....................       6


                     Notes to the Financial Statements..........................................    7-11


            Item 2.  Management's Discussion and Analysis of Financial Condition and Results
                       of Operations............................................................   12-16


PART II.   OTHER INFORMATION:

            Items 1-6...........................................................................      17
</TABLE>

                                       2
<PAGE>

                            AFG INVESTMENT TRUST D

                        STATEMENT OF FINANCIAL POSITION

                   September 30, 2000 and December 31, 1999
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                 September 30,           December 31,
                                                                                      2000                   1999
                                                                                  -----------            -----------
<S>                                                                               <C>                    <C>
ASSETS
Cash and cash equivalents..............................................           $ 9,146,707            $11,335,028
Marketable securities..................................................               294,000                434,176
Rents receivable.......................................................               301,233              1,790,533
Accounts receivable--affiliate.........................................               138,543              3,528,141
Accounts receivable--other.............................................                86,619                      -
Interest receivable....................................................                 7,457                 14,722
Loan receivable--Kettle Valley.........................................                75,220                 75,220
Investment--affiliate..................................................               625,313                668,813
Investment in Kettle Valley............................................             4,230,922              4,365,372
Investment in EFG/Kirkwood.............................................             2,647,165              2,030,100
Investment--other......................................................               146,450                      -
Other assets, net of accumulated amortization of $27,236 at
 September 30, 2000....................................................               404,308                332,812
Equipment at cost, net of accumulated depreciation of $23,977,975
 and $24,612,634 at September 30, 2000 and December 31, 1999,
 respectively..........................................................            39,509,869             44,761,455
                                                                                  -----------            -----------
     Total assets......................................................           $57,613,806            $69,336,372
                                                                                  ===========            ===========

LIABILITIES AND PARTICIPANTS' CAPITAL
Notes payable..........................................................           $27,167,964            $25,790,190
Accrued interest.......................................................               291,787                129,587
Accrued liabilities....................................................               171,347                 86,370
Accrued liabilities--affiliate.........................................                53,008                384,990
Deferred rental income.................................................                14,220                306,238
Other liabilities......................................................             1,488,403              1,488,403
Cash distributions payable to participants.............................                     -             13,200,000
                                                                                  -----------            -----------
     Total liabilities.................................................            29,186,729             41,385,778
                                                                                  -----------            -----------
Participants' capital (deficit):
 Managing Trustee......................................................                 2,699                (23,853)
 Special Beneficiary...................................................                22,264               (196,792)
 Class A Beneficiary Interests (1,934,755 Interests; initial purchase
  price of $25 each)...................................................            29,969,715             30,012,322
 Class B Beneficiary Interests (3,142,083 Interests; initial purchase
  price of $5 each)....................................................                47,721               (225,761)
 Treasury Interests (154,275 Class A Interests at Cost)................            (1,615,322)            (1,615,322)
                                                                                  -----------            -----------
     Total participants' capital.......................................            28,427,077             27,950,594
                                                                                  -----------            -----------
     Total liabilities and participants' capital.......................           $57,613,806            $69,336,372
                                                                                  ===========            ===========
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       3
<PAGE>

                             AFG INVESTMENT TRUST D

                            STATEMENT OF OPERATIONS

        For the three and nine months ended September 30, 2000 and 1999
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                For the three months ended           For the nine months ended
                                                       September 30,                        September 30,
                                                  2000              1999              2000               1999
                                               ----------        ----------        ----------        -----------
<S>                                            <C>               <C>               <C>               <C>
Income:
 Lease revenue.........................        $1,686,718        $3,538,502        $5,749,484        $11,268,966
 Interest income.......................           167,452           161,744           446,436            483,523
 Gain on sale of equipment.............           830,404           224,486         1,173,823            392,774
 Gain on sale of marketable                             -                 -            86,079                  -
  securities...........................
 Other income..........................            44,763                 -           317,319            261,116
                                               ----------        ----------        ----------        -----------
     Total income......................         2,729,337         3,924,732         7,773,141         12,406,379
                                               ----------        ----------        ----------        -----------


Expenses:
 Depreciation..........................         1,446,381         1,738,932         4,395,330          5,879,479
 Amortization..........................            26,263                 -            75,386                  -
 Interest expense......................           619,105           631,869         1,897,611          2,023,046
 Management fees - affiliates..........           100,403           185,848           331,599            580,952
 Operating expenses - affiliate........           157,472           310,490           492,281            609,420
 Loss on investment in Kettle Valley...            86,300                 -            86,300                  -
                                               ----------        ----------        ----------        -----------
     Total expenses....................         2,435,924         2,867,139         7,278,507          9,092,897
                                               ----------        ----------        ----------        -----------

Net income.............................        $  293,413        $1,057,593        $  494,634        $ 3,313,482
                                               ==========        ==========        ==========        ===========


Net income
 per Class A Beneficiary Interest......             $0.10        $     0.34            $(0.01)       $      1.07
                                               ==========        ==========        ==========        ===========
 per Class B Beneficiary Interest......             $0.02        $     0.09             $0.09        $      0.29
                                               ==========        ==========        ==========        ===========
Cash distributions declared
 per Class A Beneficiary Interest......        $        -        $     0.41        $        -        $      2.00
                                               ==========        ==========        ==========        ===========
 per Class B Beneficiary Interest......        $        -        $     0.11        $        -        $      0.33
                                               ==========        ==========        ==========        ===========
</TABLE>

  The accompanying notes are an integral part of these financial statements.

                                       4
<PAGE>

                             AFG INVESTMENT TRUST D

                 STATEMENT OF CHANGES IN PARTICIPANTS' CAPITAL

                  For the nine months ended September 30, 2000
                                  (Unaudited)

<TABLE>
<CAPTION>
                                     Managing    Special         Class A                Class B
                                     Trustee   Beneficiary    Beneficiaries          Beneficiaries         Treasury
                                      Amount     Amount   Interests    Amount     Interests    Amount     Interests        Total
                                      ------     ------   ---------    ------     ---------    ------     ---------        -----
<S>                                 <C>         <C>           <C>        <C>            <C>        <C>          <C>            <C>
Balance at December 31, 1999......   $(23,853) $(196,792) 1,934,755  $30,012,322   3,142,083  $(225,761)  $(1,615,322)  $27,950,594
 Net income (loss)................     26,423    217,198          -      (18,869)          -    269,882             -       494,634
  Unrealized gain (loss) on
   marketable securities
   /marketable
  securities--affiliate...........        129      1,858          -      (23,738)          -      3,600             -       (18,151)
                                     --------  ---------  ---------  -----------   ---------  ---------   -----------   -----------
Comprehensive income (loss).......     26,552    219,056          -      (42,607)          -    273,482             -       476,483
                                     --------  ---------  ---------  -----------   ---------  ---------   -----------   -----------
Balance at September 30, 2000.....   $  2,699  $  22,264  1,934,755  $29,969,715   3,142,083  $  47,721   $(1,615,322)  $28,427,077
                                     ========  =========  =========  ===========   =========  =========   ===========   ===========
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       5
<PAGE>

                            AFG INVESTMENT TRUST D

                            STATEMENT OF CASH FLOWS

             For the nine months ended September 30, 2000 and 1999
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                  2000                     1999
                                                                              ------------              -----------
<S>                                                                           <C>                       <C>
Cash flows provided by (used in) operating activities:
Net income.......................................................             $    494,634              $ 3,313,482
Adjustments to reconcile net income to net cash provided by
 operating activities:
  Depreciation and amortization..................................                4,470,716                5,879,479
  Accretion of bond discount.....................................                   (6,504)                       -
  Gain on sale of equipment......................................               (1,173,823)                (392,774)
  Gain on sale of marketable securities..........................                  (86,079)                       -
  Loss on Investment in Kettle Valley............................                   86,300                        -
Changes in assets and liabilities
 Decrease (increase) in:
  Rents receivable...............................................                1,489,300                1,550,782
  Accounts receivable - affiliate................................                3,389,598                 (169,644)
  Accounts receivable - other....................................                  (86,619)                 (49,396)
  Interest receivable............................................                    7,265                        -
  Other assets...................................................                  (98,732)                       -
 Increase (decrease) in:
  Accrued interest...............................................                  162,200                  (95,222)
  Accrued liabilities............................................                   84,977                 (291,500)
  Accrued liabilities--affiliate.................................                 (331,982)                  11,026
  Deferred rental income.........................................                 (292,018)                (296,224)
                                                                              ------------              -----------
     Net cash provided by operating activities...................                8,109,233                9,460,009
                                                                              ------------              -----------

Cash flows provided by (used in) investing activities:
 Purchase of marketable securities...............................                        -                 (128,529)
 Proceeds from equipment sales...................................                2,030,079                1,541,065
 Proceeds from sale of marketable securities.....................                  214,608                        -
 Investment in EFG/Kirkwood......................................                 (617,065)              (1,818,000)
 Investment - affiliate..........................................                   43,500                   30,813
 Investment in Kettle Valley.....................................                        -               (3,064,700)
 Investment - other..............................................                 (146,450)                       -
 Other liabilities...............................................                        -                1,488,403
                                                                              ------------              -----------
     Net cash provided by (used in) investing activities.........                1,524,672               (1,950,948)
                                                                              ------------              -----------

Cash flows provided by (used in) financing activities:
 Proceeds from notes payable.....................................                6,091,738                        -
 Principal payments--notes payable...............................               (4,713,964)              (5,158,042)
 Distributions paid..............................................              (13,200,000)              (5,249,333)
 Restricted cash.................................................                        -                5,110,315
                                                                              ------------              -----------
     Net cash used in financing activities.......................              (11,822,226)              (5,297,060)
                                                                              ------------              -----------

Net (decrease) increase in cash and cash equivalents.............               (2,188,321)               2,212,001
Cash and cash equivalents at beginning of period.................               11,335,028                9,100,016
                                                                              ------------              -----------
Cash and cash equivalents at end of period.......................             $  9,146,707              $11,312,017
                                                                              ============              ===========

Supplemental disclosure of cash flow information:
 Cash paid during the period for interest........................             $  1,735,411              $ 2,118,268
                                                                              ============              ===========
Supplemental disclosure of non-cash activity:
 See Note 6 to the financial statements.
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       6
<PAGE>

                             AFG INVESTMENT TRUST D

                       NOTES TO THE FINANCIAL STATEMENTS

                               September 30, 2000
                                  (Unaudited)

Note 1--Basis of Presentation

  The financial statements presented herein are prepared in conformity with
generally accepted accounting principles for interim financial information and
with the instructions for preparing Form 10-Q under Rule 10-01 of Regulation S-X
of the Securities and Exchange Commission and are unaudited. As such, these
financial statements do not include all information and footnote disclosures
required under generally accepted accounting principles for complete financial
statements and, accordingly, the accompanying financial statements should be
read in conjunction with the footnotes presented in the 1999 Annual Report.
Except as disclosed herein, there have been no material changes to the
information presented in the footnotes to the 1999 Annual Report.

  In the opinion of management, all adjustments (consisting of normal and
recurring adjustments) considered necessary to present fairly the financial
position at September 30, 2000 and December 31, 1999 and results of operations
for the three and nine months ended September 30, 2000 and 1999 have been made
and are reflected.

Note 2--Cash Equivalents and Marketable Securities

  The Trust considers all highly liquid investments with an original maturity of
three months or less to be cash equivalents. Marketable securities consist of
equity securities and debt securities that are classified as available-for-sale.
Available-for-sale securities are carried at fair value, with unrealized gains
and losses reported as a separate component of participants' capital. The
amortized cost of debt securities is adjusted for amortization of premiums and
accretion of discounts to maturity. Such amortization and accretion are included
in interest income on the accompanying Statement of Operations.

  The Trust recorded a net unrealized loss on available-for-sale securities of
$18,151 during the nine months ended September 30, 2000 that is included as a
separate component of participants' capital. At September 30, 2000, total debt
securities had an amortized cost of $291,984 and a fair value of $294,000.
During the nine months ended September 30, 2000, total comprehensive income
amounted to $476,483.

Note 3--Revenue Recognition

  Rents are payable to the Trust monthly, quarterly or semi-annually and no
significant amounts are calculated on factors other than the passage of time.
The leases are accounted for as operating leases and are noncancellable. Rents
received prior to their due dates are deferred. In certain instances, the Trust
may enter primary-term, renewal or re-lease agreements which expire beyond the
Trust's anticipated dissolution date. This circumstance is not expected to
prevent the orderly wind-up of the Trust's business activities as the Managing
Trustee and the Advisor would seek to sell the then-remaining equipment assets
either to the lessee or to a third-party, taking into consideration the amount
of future noncancellable rental payments associated with the attendant lease
agreements. Future minimum rents of $13,424,744 are due as follows:

          For the year ending September 30,
               2001.........................    $ 5,123,526
               2002.........................      4,717,143
               2003.........................      3,312,397
               2004.........................        271,678
                                                -----------

                                       7
<PAGE>

                    Total...................    $13,424,744
                                                ===========



                                       8
<PAGE>

                            AFG INVESTMENT TRUST D

                NOTES TO THE FINANCIAL STATEMENTS--(Continued)


Note 3--Revenue Recognition (continued)

  During 2000, the Trust and an affiliated trust owning an interest in a Boeing
767-300 aircraft entered into a lease extension agreement with Scandinavian
Airlines System. The lease extension, effective upon the expiration of the
existing lease term on December 29, 2000, extended the lease for an additional
two years and eleven months, commencing December 30, 2000 and expiring November
29, 2003. Under the terms of this agreement, the Partnership will receive
aggregate rents of $9,508,730 over the term of this extension.

Note 4--Other Assets

  Other assets include a security deposit of $332,812 with the local government
in British Columbia, Canada, related to the Trust's investment in Kettle Valley.
In addition, other assets includes certain deferred financing costs which are
being amortized over 29 months, which is the life of the related loan.

Note 5--Equipment

  The following is a summary of equipment owned by the Trust at September 30,
2000. Remaining Lease Term (Months), as used below, represents the number of
months remaining from September 30, 2000 under contracted lease terms and is
presented as a range when more than one lease agreement is contained in the
stated equipment category. A Remaining Lease Term equal to zero reflects
equipment either held for sale or re-lease or being leased on a month-to-month
basis. In the opinion of EFG, the acquisition cost of the equipment did not
exceed its fair market value.

                                              Remaining
                                              Lease Term            Equipment,
          Equipment Type                       (Months)              at Cost
          --------------                       --------              -------
Aircraft...........................             21-38            $45,014,136
Locomotives........................                 0              8,312,342
Materials handling.................              0-32              4,061,940
Construction and mining............              0-21              3,430,475
Miscellaneous......................                 2              1,692,068
Manufacturing......................                 0                439,707
Research & test....................                 0                338,749
Tractors and heavy duty trucks.....              3-34                149,585
Computers and peripherals..........                 0                 42,310
Communications.....................                 0                  6,532
                                                                 -----------
                                     Total equipment cost         63,487,844
                                     Accumulated depreciation     23,977,975
                                                                 -----------
                                     Equipment, net of           $39,509,869
                                     accumulated depreciation    ===========

  At September 30, 2000, the Trust's equipment portfolio included equipment
having a proportionate original cost of $32,092,521, representing approximately
51% of total equipment cost.

  Certain of the Trust's equipment and the related lease terms were used to
secure the Trust's term loans with third-party lenders. The preceding summary
includes leveraged equipment having an aggregate original cost of approximately
$48,266,000 and a net book value of $34,977,554 at September 30, 2000.

                                       9
<PAGE>

                            AFG INVESTMENT TRUST D

                NOTES TO THE FINANCIAL STATEMENTS--(Continued)


Note 5--Equipment (continued)

  The summary above includes fully-depreciated equipment held for sale or re-
lease with an original cost of approximately $20,900. The Managing Trustee is
actively seeking the sale or re-lease of all equipment not on lease.


Note 6--Investment in Kettle Valley

  On March 1, 1999, the Trust and an affiliated trust (collectively, the
"Buyers") formed EFG/Kettle Development LLC, a Delaware limited liability
company, for the purpose of acquiring a 49.9% indirect ownership interest (the
"Interest") in a real estate development in Kelowna, British Columbia called
Kettle Valley. EFG/Kettle Development LLC, upon receiving the Buyers' equity
investment, purchased the Interest from a special purpose company ("SPC")
whose subsidiaries owned a 99.9% limited partnership interest in Kettle Valley
Development Limited Partnership ("KVD LP"). The SPC and its subsidiaries were
established by the seller, in part, for income tax purposes and have no business
interests other than the development of Kettle Valley. KVD LP is a Canadian
Partnership that owns the property, consisting of approximately 280 acres of
land. The project, which is in the early stages of being marketed to homebuyers,
is zoned for 1,000 residential units in addition to commercial space. The seller
is an unaffiliated third-party company and has retained the remaining 50.1%
ownership interest in the SPC. A newly organized Canadian affiliate of EFG
replaced the original general partner of KVD LP on March 1, 1999.

  The Trust's ownership share in EFG/Kettle Development LLC is 49.396% and had a
cost of $4,365,372, including a 1% acquisition fee of $43,222 paid to EFG. This
acquisition was funded with cash of $3,064,700 and a non-recourse note for
$1,300,672. The note bears interest at an annualized rate of 7.5% and will be
fully amortized over 34 months, commencing April 1, 1999. The note is secured
only by the Trust's stock interests in the SPC. The Trust's cost basis in this
investment was approximately $642,000 greater than its equity interest in the
underlying net assets at December 31, 1999. This difference is being amortized
over a period of 10 years beginning January 1, 2000. The amount amortized is
included as an offset to "Investment in Kettle Valley" and was $48,150 during
the nine months ended September 30, 2000.

  The Trust accounts for its investment Kettle Valley using the equity method of
accounting.  Under the equity method of accounting, the Trust's investment is
(i) increased (decreased) to reflect the Trust's share of income (loss) of the
investee and (ii) decreased to reflect any distributions the Trust received from
the investee.  The Trust's investment was decreased by $86,300 during the nine
months ended September 30, 2000, reflecting its share of loss from Kettle
Valley.

  In addition, the seller purchased a residual sharing interest in a Boeing 767-
300 aircraft owned by the Buyers and leased to Scandinavian Airlines System
("SAS"). The seller paid $3,013,206 to the Buyers ($1,488,403, or 49.396% to
the Trust) for the residual interest, which is subordinate to certain preferred
payments to be made to the Buyers in connection with the aircraft. Payment of
the residual interest is due only to the extent that the Trust receives net
residual proceeds from the aircraft. The residual interest is non-recourse to
the Buyers and is reflected as Other Liabilities on the accompanying Statement
of Financial Position at September 30, 2000.

Note 7--Investment in EFG/Kirkwood

  On May 1, 1999, the Trust and three affiliated trusts (collectively the
"Trusts") and another affiliate formed EFG/Kirkwood Capital LLC
("EFG/Kirkwood") for the purpose of acquiring preferred and common stock
interest in Kirkwood Associates Inc. ("KAI"). The Trusts purchased Class A
Interests in EFG/Kirkwood and the other

                                       10
<PAGE>

                            AFG INVESTMENT TRUST D

                NOTES TO THE FINANCIAL STATEMENTS--(Continued)


Note 7--Investment in EFG/Kirkwood (continued)

affiliate purchased Class B Interests in EFG/Kirkwood. Generally, the Class A
Interest holders are entitled to certain preferred returns prior to distribution
payments to the Class B Interest holder. On May 1, 2000 the Trusts exchanged
their interests in KAI common stock and preferred stock for corresponding pro-
rata interests in Mountain Resort Holdings LLC ("Mountain Resort"). Mountain
Resort owns a ski resort, a local public utility, and land which is held for
development. The resort is located in Kirkwood, California and is approximately
30 miles from South Lake Tahoe, Nevada. Subsequent to making its investment in
Mountain Resort, EFG/Kirkwood made a 50% investment in Mountain Springs Resorts
LLC, an entity formed for the purpose of acquiring an ownership interest in a
Colorado ski resort. The Trust's ownership interest in EFG/Kirkwood had a cost
of $2,647,165, including a 1% acquisition fee ($26,210) paid to EFG. The Trust's
investment in EFG/Kirkwood is accounted for on the equity method.

Note 8--Related Party Transactions

  All operating expenses incurred by the Trust are paid by EFG on behalf of the
Trust and EFG is reimbursed at its actual cost for such expenditures. Fees and
other costs incurred during the nine month periods ended September 30, 2000 and
1999, which were paid or accrued by the Trust to EFG or its Affiliates, are as
follows:

<TABLE>
<CAPTION>
                                                                   For the nine months ended
                                                                         September 30,
                                                                      2000              1999
                                                                  --------        ----------
<S>                                                              <C>             <C>
Acquisition fees........................................          $  7,560        $   19,285
Management fees.........................................           331,599           580,952
Administrative charges..................................           156,866           133,522
Reimbursable operating expenses due to third parties....           335,415           475,898
                                                                  --------        ----------
 Total..................................................          $831,440        $1,209,657
                                                                  ========        ==========
</TABLE>

  All rents and proceeds from the sale of equipment are paid directly to either
EFG or to a lender. EFG temporarily deposits collected funds in a separate
interest-bearing escrow account prior to remittance to the Trust. At September
30, 2000, the Trust was owed $138,543 by EFG for such funds and the interest
thereon. These funds were remitted to the Trust in October 2000.

  During 1998, the Trust purchased limited partnership units (the "Units") in
AFG International Limited Partnership (the "Partnership"), a real estate
limited partnership sponsored by EFG that owns two commercial buildings leased
to an investment grade educational institution. The Trust purchased 7.25 Units
at a cost of $100,000 per unit for an aggregate purchase price of $725,000. As a
result of the purchase of the Units, the Trust owns approximately 22.5% of the
Partnership. The Trust accounts for its investment in the Partnership under the
equity method of accounting. As such, the carrying value of the Trust's
investment in the Partnership is increased or decreased by an amount equal to
the Trust's share of the Partnership's income or losses, respectively, and
decreased for any distributions received from the Partnership. At September 30,
2000, this investment had a carrying balance of $625,313 and is reflected as
Investment--affiliate on the accompanying Statement of Financial Position.

Note 9--Notes Payable

                                       11
<PAGE>

  Notes payable at September 30, 2000 consisted of installment notes of
$27,167,964 payable to banks and institutional lenders. The notes bear interest
rates ranging between 7.43% and 9.95%, except for two notes which bear a
fluctuating interest rate based on LIBOR plus a margin. All of the installment
notes are non-recourse and are

                                       12
<PAGE>

                            AFG INVESTMENT TRUST D

                NOTES TO THE FINANCIAL STATEMENTS--(Continued)


Note 9--Notes Payable (continued)

collateralized by the equipment and assignment of the related lease payments,
except for one note which is collateralized by certain stock interests.
Generally, the installment notes will be fully amortized by noncancellable
rents. However, the Trust has balloon payment obligations of $19,980,682,
$4,600,000, and $282,421 at the expiration of the lease terms related to an
aircraft leased to Scandinavian Airlines System, an aircraft leased to Emery
Worldwide, and an MD-87 aircraft leased to Reno Air, Inc., respectively. The
Managing Trustee is currently negotiating with the lender of the SAS debt to
extend the term of the debt consistent with the term of the SAS lease extension.
The carrying amount of notes payable approximates fair value at September 30,
2000 (See Note 3).

  The annual maturities of the notes payable are as follows:


            For the year ending September 30,
                2001.................................       $21,372,376
                2002.................................           883,910
                2003.................................         4,911,678
                                                            -----------
                Total................................       $27,167,964
                                                            ===========


Note 10--Guaranty Agreement

  On March 8, 2000, the Trust and three affiliated trusts entered into a
guaranty agreement whereby the trusts, jointly and severally, have guaranteed
the payment obligations under a master lease agreement between Echelon
Commercial LLC, a newly-formed Delaware company that is controlled by Gary D.
Engle, President and Chief Executive Officer of EFG, as lessee, and Heller
Affordable Housing of Florida, Inc., and two other entities, as lessor
("Heller"). The lease payments of Echelon Commercial LLC to Heller are
supported by lease payments to Echelon Commercial LLC from various sub-lessees
who are parties to commercial and residential lease agreements under the master
lease agreement. The guarantee of lease payments by the Trust and the three
affiliated trusts is capped at a maximum of $34,500,000, excluding expenses that
could result in the event that Echelon Commercial LLC experiences a default
under the terms of the master lease agreement. An agreement among the four
trusts provides that the Trust is responsible for 46.34% of the current
guaranteed amount, or $11,065,569 at September 30, 2000. In consideration for
its guarantee, the Trust will receive an annualized fee equal to 4% of the
average guarantee amount outstanding during each quarterly period. Accrued but
unpaid fees will accrue and compound interest quarterly at an annualized
interest rate of 7.5% until paid. The Trust will receive minimum aggregate fees
for its guarantee of not less than $463,400, excluding interest. During the nine
months ended September 30, 2000, the Trust received an upfront cash fee of
$231,700 and recognized $317,319 of income related to this guaranty fee. The
guaranty fee is reflected as Other Income on the accompanying Statement of
Operations for the nine months ended September 30, 2000.

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<PAGE>

                             AFG INVESTMENT TRUST D

                                   Form 10-Q

                        PART I.   FINANCIAL INFORMATION


Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.

  Certain statements in this quarterly report of AFG Investment Trust D (the
"Trust") that are not historical fact constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995 and
are subject to a variety of risks and uncertainties. There are a number of
important factors that could cause actual results to differ materially from
those expressed in any forward-looking statements made herein. These factors
include, but are not limited to, the collection of the Trust's contracted rents,
the realization of residual proceeds for the Trust's equipment, the performance
of the Trust's non-equipment investments, and future economic conditions.

Three and nine months ended September 30, 2000 compared to the three and nine
months ended September 30, 1999


Results of Operations

  For the three and nine months ended September 30, 2000, the Trust recognized
lease revenue of $1,686,718 and $5,749,484, respectively, compared to $3,538,502
and $11,268,966, respectively, for same periods in 1999. The decrease in lease
revenue from 1999 to 2000 resulted primarily from lease term expirations and
equipment sales, including the sale of a vessel and the Trust's investment in an
aircraft that had generated lease revenues of $1,739,375 and $742,500,
respectively, during the nine months ended September 30, 1999. In addition, the
Trust renewed or re-leased certain lease contracts that had expired after
September 30, 1999 at rental rates lower than provided for in the original lease
contracts. The level of lease revenue to be recognized by the Trust in the
future may be impacted by future reinvestment; however, the extent of such
impact cannot be determined at this time.

  The Trust's equipment portfolio includes certain assets in which the Trust
holds a proportionate ownership interest. In such cases, the remaining interests
are owned by EFG or an affiliated equipment leasing program sponsored by EFG.
Proportionate equipment ownership enables the Trust to further diversify its
equipment portfolio by participating in the ownership of selected assets,
thereby reducing the general levels of risk which could result from a
concentration in any single equipment type, industry or lessee. The Trust and
each affiliate individually report, in proportion to their respective ownership
interests, their respective shares of assets, liabilities, revenues, and
expenses associated with the equipment.

  Interest income for the three and nine months ended September 30, 2000 was
$167,452 and $446,436, respectively, compared to $161,744 and $483,523,
respectively, for the same periods in 1999. Generally interest income is
generated from the temporary investment of rental receipts and equipment sales
proceeds in short-term instruments. Interest income in 1999 also included
interest earned on proceeds from the issuance of the Trust's Class B Interests
in 1997. The amount of future interest income is expected to fluctuate as a
result of changing interest rates, and the amount of cash available for
investment, among other factors. In addition, the Trust made a distribution of
$13,200,000 in January 2000, which resulted in a reduction in cash available for
investment.

  During the three and nine months ended September 30, 2000, the Trust sold
equipment having a net book value of $700,240 and $856,256, respectively, to
existing lessees and third parties. These sales resulted in a net gain, for
financial statement purposes, of $830,404 and $1,173,823, respectively.

                                       14
<PAGE>

  During the three and nine months ended September 30, 1999, the Trust sold
equipment having a net book value of $139,333 and $1,148,291, respectively, to
existing lessees and third parties, these sales resulted in a net gain, for
financial statement purposes, of $224,486 and $392,774, respectively.

  It cannot be determined whether future sales of equipment will result in a net
gain or a net loss to the Trust, as such transactions will be dependent upon the
condition and type of equipment being sold and its marketability at the time of
sale. In addition, the amount of gain or loss reported for financial statement
purposes is partly a function of the amount of accumulated depreciation
associated with the equipment being sold.

  The ultimate realization of residual value for any type of equipment is
dependent upon many factors, including EFG's ability to sell and re-lease
equipment. Changing market conditions, industry trends, technological advances,
and many other events can converge to enhance or detract from asset values at
any given time. EFG attempts to monitor these changes in order to identify
opportunities which may be advantageous to the Trust and which will maximize
total cash returns for each asset.

  The total economic value realized upon final disposition of each asset is
comprised of all primary lease term revenue generated from that asset, together
with its residual value. The latter consists of cash proceeds realized upon the
asset's sale in addition to all other cash receipts obtained from renting the
asset on a re-lease, renewal or month-to-month basis. The Trust classifies such
residual rental payments as lease revenue. Consequently, the amount of gain or
loss reported in the financial statements is not necessarily indicative of the
total residual value the Trust achieved from leasing the equipment.

  During the nine months ended September 30, 2000, the Trust sold marketable
securities, having a book value of $128,529, resulting in a gain, for financial
statement purposes, of $86,079.

  On March 8, 2000, the Trust and three affiliated trusts entered into a
guaranty agreement whereby the trusts, jointly and severally, have guaranteed
the payment obligations under a master lease agreement between Echelon
Commercial LLC, as lessee, and Heller Affordable Housing of Florida, Inc., and
two other entities, as lessor ("Heller"). In consideration for its guarantee,
the Trust will receive an annualized fee equal to 4% of the average guarantee
amount outstanding during each quarterly period. Accrued but unpaid fees will
accrue and compound interest quarterly at an annualized interest rate of 7.5%
until paid. During the nine months ended September 30, 2000, the Trust received
an upfront cash fee of $231,700 and recognized $317,319 of income related to
this guaranty fee. The guaranty fee is reflected as Other Income on the
accompanying Statement of Operations for the nine months ended September 30,
2000.  See additional discussion in Note 10 to the financial statements herein.

  The Trust received $261,116 in 1999 as a breakage fee from a third-party
seller in connection with a transaction for new investments that was canceled by
the seller during the first quarter of 1999. This amount is reflected as Other
Income on the accompanying Statement of Operations for the nine months ended
September 30, 1999.

  Depreciation expense was $1,446,381 and $4,395,330, respectively, for the
three and nine months ended September 30, 2000 compared to $1,738,932 and
$5,879,479, respectively, for the same periods in 1999. For financial reporting
purposes, to the extent that an asset is held on primary lease term, the Trust
depreciates the difference between (i) the cost of the asset and (ii) the
estimated residual value of the asset on a straight-line basis over such term.
For purposes of this policy, estimated residual values represent estimates of
equipment values at the date of primary lease expiration. To the extent that an
asset is held beyond its primary lease term, the Trust continues to depreciate
the remaining net book value of the asset on a straight-line basis over the
asset's remaining economic life. In addition, the Trust recorded amortization
expense of $26,263 and $75,386 during the three and nine months ended September
30, 2000, respectively, in connection with its investment in Kettle Valley (see
Note 6 to the financial statements herein) and certain capitalized deferred
financing costs.

                                       15
<PAGE>

  Interest expense was $619,105 and $1,897,611, respectively, for the three and
nine months ended September 30, 2000 compared to $631,869 and $2,023,046,
respectively, for the same periods in 1999. Interest expense in future periods
will decline as the principal balance of notes payable is reduced through the
application of rent receipts to outstanding debt.

  Management fees totaled $100,403 and $331,599, respectively, during the three
and nine months ended September 30, 2000, compared to $185,848 and $580,952,
respectively, for the same periods in 1999. Management fees are based on 5% of
gross lease revenue generated by operating leases and 2% of gross lease revenue
generated by full payout leases. Management fees also include a 1% management
fee on non-equipment investments, excluding cash.

  Operating expenses consist principally of administrative charges, professional
service costs, such as audit and legal fees, as well as printing, distribution
and remarketing expenses. Operating expenses were $157,472 and $492,281,
respectively, during the three and nine months ended September 30, 2000 compared
to $310,490 and $609,420 during the three and nine months ended September 30,
1999, respectively. Operating expenses were higher in 1999 principally as a
result of legal fees incurred related to the Trust's investments in Kettle
Valley and EFG/Kirkwood . The amount of future operating expenses cannot be
predicted with certainty; however, such expenses are usually higher during the
acquisition and liquidation phases of a trust. Other fluctuations typically
occur in relation to the volume and timing of remarketing activities.

  During the three and nine months ended September 30, 2000, the Trust recorded
a loss on investment in Kettle Valley of $86,300. This represents the Trust's
share of the losses of Kettle Valley recorded under the equity method of
accounting. See further discussion below.

Liquidity and Capital Resources and Discussion of Cash Flows

  The Trust by its nature is a limited life entity. As an equipment leasing
program, the Trust's principal operating activities derive from asset rental
transactions. Accordingly, the Trust's principal source of cash from operations
is provided by the collection of periodic rents. These cash inflows are used to
satisfy debt service obligations associated with leveraged leases, and to pay
management fees and operating costs. Operating activities generated net cash
inflows of $8,109,233 and $9,460,009 for the nine months ended September 30,
2000 and 1999, respectively. Future renewal, re-lease and equipment sale
activities will cause a decline in the Trust's lease revenue and corresponding
sources of operating cash. Expenses associated with rental activities, such as
management fees, also will decline as the Trust experiences a higher frequency
of remarketing events.

  The Trust's equipment is leased by a number of creditworthy, investment-grade
companies and, to date, the Trust has not experienced any material collection
problems and has not considered it necessary to provide an allowance for
doubtful accounts. Notwithstanding a positive collection history, there is no
assurance that all future contracted rents will be collected or that the credit
quality of the Trust's lessees will be maintained. Collection risk could
increase in the future, particularly as the Trust remarkets its equipment and
enters re-lease agreements with different lessees. The Managing Trustee will
continue to evaluate and monitor the Trust's experience in collecting accounts
receivable to determine whether a future allowance for doubtful accounts may
become appropriate.

  Cash expended for asset acquisitions and cash realized from asset disposal
transactions are reported under investing activities on the accompanying
Statement of Cash Flows. During the nine months ended September 30, 2000 and
1999, the Trust expended $617,065 and $1,818,000, respectively, for its
investment in EFG/Kirkwood (see Note 7 to the financial statements herein).
During the nine months ended September 30, 1999, the Trust expended $3,064,700
to acquire its investment in Kettle Valley. In connection with the investment in
Kettle Valley, the Trust was paid $1,488,403 for a residual interest in an
aircraft in which the Trust owns an interest (see Note 6 to the financial
statements herein). The Trust expended $146,450 to acquire certain other
investments and $128,529 to purchase marketable securities during the nine
months ended September 30, 2000 and 1999, respectively. During the nine months
ended September 30, 2000, the Trust realized net cash proceeds from equipment
disposals of $2,030,079 compared to $1,541,065 for the same period in 1999. Sale
proceeds in 2000 include $1,400,074 related

                                       16
<PAGE>

to the Trust's 34% interest in certain rail equipment which was sold in July
2000.  Future inflows of cash from equipment disposal transactions will vary in
timing and amount and will be influenced by many factors including, but not
limited to, the frequency and timing of lease expirations, the type of equipment
being sold, its condition and age, and future market conditions. The Trust also
realized proceeds from the disposition of marketable securities of $214,608
during the nine months ended September 30, 2000.

  At September 30, 2000, the Trust was due aggregate future minimum lease
payments of $13,424,744 from contractual lease agreements, a portion of which
will be used to amortize the principal balance of notes payable of $27,167,964.
See Notes 3 and 9 to the financial statements herein. Additional cash inflows
will be realized from future remarketing activities, such as lease renewals and
equipment sales, the timing and extent of which cannot be predicted with
certainty. This is because the timing and extent of equipment sales is often
dependent upon the needs and interests of the existing lessees. Some lessees may
choose to renew their lease contracts, while others may elect to return the
equipment. In the latter instances, the equipment could be re-leased to another
lessee or sold to a third party. Accordingly, as the Trust matures and a greater
level of its equipment assets becomes available for remarketing, the cash flows
of the Trust will become less predictable.

  In accordance with Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities", marketable
debt and equity securities classified as available-for-sale are required to be
carried at fair value. During the nine months ended September 30, 2000, the
Trust recorded a net unrealized loss on available-for-sale securities of
$18,151.

  The Trust obtained long-term financing in connection with certain equipment
leases. The origination of such indebtedness and the subsequent repayments of
principal are reported as components of financing activities. During 1999, the
Trust leveraged $1,300,672 of its investment in Kettle Valley that is being
amortized over 34 months. During 2000, the Trust obtained financing of
$6,091,738 in connection with a lease renewal with Emery Worldwide ("Emery").
Generally, each note payable is recourse only to the specific equipment financed
and to the minimum rental payments contracted to be received during the debt
amortization period (which period generally coincides with the lease rental
term). As rental payments are collected, a portion or all of the rental payment
is used to repay the associated indebtedness. The amount of cash used to repay
debt obligations may fluctuate in the future due to the financing of assets
which may be acquired. In addition, the Trust has balloon payment obligations of
$19,980,682, $4,600,000, and $282,421 at the expiration of the lease terms
related to an aircraft leased to Scandinavian Airlines System, ("SAS") an
aircraft leased to Emery, and an MD-87 aircraft leased to Reno Air, Inc.,
respectively. Emery has the option to extend its lease agreement for an
additional 30 months at the expiration of the lease term. If the lease agreement
is extended, the balloon payment will be postponed until the termination of the
30-month extension period at which time the balloon payment will be $2,750,000.
The Managing Trustee is currently negotiating with the lender of the SAS debt to
extend the term of the debt consistent with the term of the SAS lease extension.
(See Note 9 to the financial statements herein).

  The Managing Trustee has evaluated and pursued a number of potential new
investments, several of which the Managing Trustee concluded had market returns
that it believed were less than adequate given the potential risks. Most
transactions involved the equipment leasing, business finance and real estate
development industries. Although the Managing Trustee intends to continue to
evaluate additional new investments, it anticipates that the Trust will be able
to fund these new investments with cash on hand or other sources, such as the
proceeds from future asset sales or refinancings and new indebtedness. As a
result, the Trust declared a special cash distribution during the fourth quarter
of 1999 to the Trust Beneficiaries totaling $13,200,000, which was paid on
January 19, 2000.

  After the special distribution on January 19, 2000, the Trust adopted a new
distribution policy and suspended the payment of regular monthly cash
distributions. Looking forward, the Managing Trustee presently does not expect
to reinstate cash distributions until expiration of the Trust's reinvestment
period in December 2002; however, the Managing Trustee periodically will review
and consider other one-time distributions. In addition to maintaining sales
proceeds for reinvestment, the Managing Trustee expects that the Trust will
retain cash from operations to fully retire its balloon debt obligations and for
the continued maintenance of the Trust's assets. The Managing Trustee

                                       17
<PAGE>

believes that this change in policy is in the best interests of the Trust over
the long term and will have the added benefit of reducing the Trust's
distribution expenses.

  In the future, the nature of the Trust's operations and principal cash flows
will continue to shift from rental receipts to equipment sale proceeds as the
Trust matures and changes as a result of potential new investments not
consisting of equipment acquisitions. As this occurs, the Trust's cash flows
resulting from equipment investments may become more volatile in that certain of
the Trust's equipment leases will be renewed and certain of its assets will be
sold. In some cases, the Trust may be required to expend funds to refurbish or
otherwise improve the equipment being remarketed in order to make it more
desirable to a potential lessee or purchaser. The Trust's Advisor, EFG, and the
Managing Trustee will attempt to monitor and manage these events in order to
maximize the residual value of the Trust's equipment and will consider these
factors, in addition to new investment activities, the collection of contractual
rents, the retirement of scheduled indebtedness, and the Trust's future working
capital requirements, in establishing the amount and timing of future cash
distributions.

  In accordance with the Trust Agreement, upon the dissolution of the Trust, the
Managing Trustee will be required to contribute to the Trust an amount equal to
any negative balance which may exist in the Managing Trustee's tax capital
account. At December 31, 1999, the Managing Trustee had a negative tax capital
account balance of $309,285. No such requirement exists with respect to the
Special Beneficiary.

                                       18
<PAGE>

                            AFG INVESTMENT TRUST D

                                   FORM 10-Q

                          PART II. OTHER INFORMATION


Item 1.        Legal Proceedings
               Response: None


Item 2.        Changes in Securities
               Response: None


Item 3.        Defaults upon Senior Securities
               Response: None


Item 4.        Submission of Matters to a Vote of Security Holders
               Response: None


Item 5.        Other Information
               Response: None


Item 6(a).     Exhibits
               27  Financial Data Schedule


Item 6(b).     Reports on Form 8-K
               Response: None

                                   EXHIBITS
                                   --------

Exhibits                 Description
--------                 -----------
27                  Financial Data Schedule

                                      19
<PAGE>

                                 SIGNATURE PAGE

  Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on behalf of the registrant and in the capacity and
on the date indicated.


                        AFG INVESTMENT TRUST D


                        By: AFG ASIT Corporation, a Massachusetts corporation
                            and the Managing Trustee of the Registrant.


                                    /s/   Michael J. Butterfield
                        By:
                                          Michael J. Butterfield
                                    Treasurer of AFG ASIT Corporation
                                       (Duly Authorized Officer and
                                       Principal Accounting Officer)


                        Date November 14, 2000

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